Drivers across the United States have lost access to a key grant that would have saved them thousands of pounds, as industry bosses warn uptake could plummet.
The US Government has ended the $7,500 (£5,567) tax credit for electric vehicles as Donald Trump’s “Big Beautiful Bill” scraps the incentive.
The Internal Revenue Service reported that the New Clean Vehicle Credit, the Previously-Owned Clean Vehicle Credit, and the Qualified Commercial Clean Vehicle Credit will be suspended after September 30, 2025.
Drivers could save up to $7,500 on new electric vehicle leases and purchases, while a separate $4,000 (£2,969) credit was used on second-hand EVs.
The end of the tax incentives has already prompted movements in the electric vehicle market as manufacturers scramble to retain interest from drivers.
Tesla has raised lease prices for all of its vehicles in the United States, although the upfront purchase prices have not changed.
The lease price for a new Model Y has jumped from between $479 (£355) and $529 (£392) to between $529 and $599 (£444).
Data from Cox Automotive shows that Tesla’s domination as the leading EV seller in the US has fallen from more than 80 per cent to just 38 per cent in August.
President Donald Trump has ended the EV tax credit as part of his ‘Big Beautiful Bill’
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REUTERS/PA
Jim Farley, CEO of Ford, has also warned that demand for electric vehicles could be halved next month after the federal tax credit was cut.
Mr Farley said he “wouldn’t be surprised” if the market share of electric vehicles fell from between 10 and 12 per cent, to just five per cent after the incentive is removed.
Speaking at an event in Detroit, Michigan, he said: “I think it’s going to be a vibrant industry, but it’s going to be smaller, way smaller than we thought, especially with the policy change in the tailpipe emissions, plus the $7,500 consumer incentive going away.
“We’re going to find out in a month. I wouldn’t be surprised that the EV sales in the US go down to five per cent.”
President Trump purchased a Tesla from Elon Musk in March earlier this year
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REUTERSIt comes as Ford prepares to overhaul its powertrain plans after its recent “Model T moment”, which contained plans for an affordable £22,000 pick-up truck.
The new Ford Universal EV Platform will see the brand manufacture vehicles with advanced prismatic lithium iron phosphate (LFP) batteries that will improve range and general performance.
President Trump has been a long-time critic of electric cars, with wild claims and bold social media statements about the zero emission vehicles.
On Christmas Day in 2023, Mr Trump took to Truth Social to attack “crooked” Joe Biden, rage about former Special Counsel Jack Smith’s “poorly executed WITCH HUNT”, and migrants.
He also said that “all electric car lunacy”, alongside “woke military”, “high taxes” and inflation”, should “ROT IN HELL”.
Similarly, Vice President JD Vance previously called for the introduction of the “Drive American Act”.
This called for the repeal of all electric vehicle incentives and the introduction of an “America First Vehicle Credit” to help US citizens buy cars made in the US.
The aim of the Act was to promote petrol and diesel cars and vans made in the United States, with a total incentive of $7,500 (£5,567) depending on the vehicle’s payload.